Insurance · NJ & PA
Annuities & Life Insurance
Considering purchasing an annuity or life insurance? Contact me for a free consultation and review your options.
Annuities
What Are Annuities?
Many people have questions about annuities or are confused about which annuity may be right for them, if any at all.
Definition
A contract with an insurance company that may accumulate value, provide periodic income, or do both.
What Types of Annuities Are There?
There are three broad annuity categories.
Less market exposureMore market exposure
Three Categories
Fixed, Variable & Indexed Annuities
Category 1
Fixed Annuities
A fixed annuity provides a stated or declared interest rate for a specified period, with guarantees backed by the issuing insurance company. After an initial period, the rate may change according to the contract. When annuitized, payments can be structured for a stated period or for life.
Potential fitInvestors seeking a stated rate of return and the option to elect an income stream.
Key considerationRates can reset, withdrawals may be restricted, and guarantees depend on the insurer.
Names they may go by: SPDA Single premium deferred annuity, MYGA Multi-year guaranteed annuity
Category 2
Variable Annuities
A variable annuity allocates premiums among investment options, often called subaccounts. Contract value can rise or fall with investment performance. Variable annuities may offer tax-deferred growth, death-benefit features, and annuity payout options, but expenses are often higher than those of typical mutual funds.
Potential fitInvestors seeking market-based growth potential with optional insurance features.
Key considerationInvestment losses are possible, fees can be layered, and the prospectus should be reviewed carefully.
Category 3
Indexed Annuities
Indexed annuities combine insurance guarantees with an interest-crediting method linked, in part, to one or more market indexes. Returns are not the same as directly investing in the index, and dividends are generally excluded unless the contract states otherwise.
Indexed annuities generally offer more return potential than traditional fixed annuities but less direct market exposure than variable annuities.
Key considerationCaps, participation rates, spreads, crediting periods, and other contract terms can materially affect results.
Before You Buy
What Should I Consider When Shopping for an Annuity?
Focus on the insurer, the complete cost structure, the contract’s liquidity terms, and how the proposed annuity supports a specific planning objective.
1
Financial Strength and Claims-Paying Ability
Annuity guarantees are backed by the issuing insurance company, not by a bank or the federal government. Review the insurer’s financial-strength ratings and understand that ratings are opinions, can change, and are not guarantees.
Major rating organizations include:
A.M. BestMoody’s Investors ServiceS&P Global RatingsFitch Ratings
2
Complete Cost and Compensation
Ask for a complete fee and surrender-charge schedule. Contract costs vary widely, and contracts with more benefits or riders generally cost more.
Life Insurance
Life Insurance
Contact us today to start exploring your life insurance options.
NJ & PA Residents
Request a Life Insurance or Annuity Quote
If you are a resident of New Jersey or Pennsylvania and would like a life insurance or annuity quote, please contact me.